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Why Your High Conversion Rate Might Backfire (And How to Avoid It)

The numbers on your graphs are up and to the right.

Conversion rates at or above industry averages.

But…

Revenue’s flat. Stagnating or declining even.

The problem is that those seemingly high conversion rates are a red herring. The sheer quantity of free trials or new leads looks enticing, seducing you with the promise of big numbers getting even bigger.

But in reality, the alluring illusion is sabotaging your results.

Here’s why.

Why Removing Friction isn’t Always a Good Idea

As an inexperienced marketing consultant years ago, I wanted to impress a new client by going above-and-beyond our agreed upon SEO scope; throwing in some badly needed landing page updates to skyrocket AdWords conversions.

It wouldn’t be that difficult. Page content was wordy and jargony. The number of form fields overwhelming.

Not to mention, we could improve the design, run a few quick iterative A/B tests, and start squeezing out more juice in no time.

Basic stuff. Common conversion rate optimization knowledge.

And yet they said no. Polite, but firm.

Why?

This business had a consultative sales process. The consumers were educated, and it was a big-ticket item that wasn’t taken lightly. Their customers researched and needed a thorough education in most cases. And they had to want to purchase. Badly.

Otherwise the sale, even if it went through, wouldn’t be profitable or end well for either party.

In other words, it literally doesn’t matter what color the CTA button would have been in the grand scheme of things. And as a newbie, I lacked that context.

In fact, persisting with some landing page optimization tactics that are so common today, like throwing up an exit intent pop up to artificially boost lead conversion rates, would probably only do more harm than good in the long run – turning off would-be customers to get a few extra conversions fooled by impulse.

We’re taught to remove friction to increase conversions. And that’s true. It does. You can swiftly raise conversions 11% by removing a few form fields. Making it easier to convert, quicker, usually resulting in better numbers.

But in this case, they were right. I was wrong. (First time that’s happened, I swear.)

Because many times when you use misguided tactics to increase conversion rates, you’re effectively lowering the lead quality that’s getting through.

When MORE Conversions LOWER Quality

Software company Moz learned this lesson first hand when analyzing who their most profitable customers were.

They looked at the number of free to paid trial conversions, taking into account how the number of website visits correlated with loyalty metrics like churn.

The findings, recounted by founder Rand Fishkin in this Whiteboard Friday, were surprising.

For example, Moz customers that converted on only the first or second website visit “tend to leave early and often”. The customer loyalty is low, with reportedly “very high churn and low retention”.

Contrast that with their best customers. The ones who’re most loyal, sticking around longer to drive up that Lifetime Value of a Customer. The average is 8 website visits prior to signing up for their free trial.

And even if they visit 14-20 more times, “that loyalty keeps increasing”.

Coincidentally, similar results were just shared in another recent Moz post. This time, Wordstream founder Larry Kim shared several CRO truth bombs to separate fact from fiction when it comes to the best strategies for increasing site conversions.

As you can imagine, the results weren’t what you’d expect.

They analyzed over 100,000 global companies, finding that most typically small results from A/B tests “don’t persist”, typically fizzling out over time for various reasons.

But the big news was the fact that a “CRO increase in quantity typically lowers quality”.

He went on to share data from a customer that shows as landing page conversions increased, the quality of Marketing Qualified Leads (you know, the peeps who’re most likely gonna give you some loot) declined.

Most clients and bosses have no idea what data-driven marketers do on a daily basis.

They get in, in theory. But they don’t understand it, in detail.

There’s a ton of nuance behind what drives what. And without a deeper understanding of how it all works, they lack the perspective. If you lack perspective, you gravitate towards surface level, easy to understand evidence.

Like Open Rates. Or Conversion Rates. Without taking into account the context of those numbers.

That’s not a knock. It’s the reality of specialization. That’s why you drop a car off with the mechanic and let them figure out why that funny sound happens each time you start your car.

A good product virtually sells itself. Like a boulder gathering momentum on a descent. Journalists jump at the chance to write about it. The rabid public quenches their starvation for this new widget in their life.

The value proposition is the way you communicate the most valuable aspect of your Product to a specific audience. Like a translation in their language to match their worldview.

2. (Sometimes) More Friction is Better

For example, people clicking on an AdWords link after typing in exactly what they’re looking for understand they have some need, but not brand awareness at this point. So they’re relatively cold, unfamiliar with who you are and why you’re credible or unique.

That’s OK for a simple, low-priced product or commodity purchase. That’s not OK for a high-touch product or intangible service.

Sending these visitors to a short-form landing page sans navigation would tank results. Similar to the Moz example earlier, they need a chance to look around. To browse. To become familiar.

Additional methods such as retargeting and marketing automation can be brought into play in order to build up the necessary trust, knowledge and level of confidence in order to keep this customer around for awhile.

Now contrast that to people who’ve been on the receiving end of emails, social messages, and retargeting ads for a few weeks. They have had a chance to develop familiarity through retargeting ads, and trust through interacting with your other available offers.

In this case, a direct, no-BS approach that’s concise might work best. In this case, the less friction, the better (generally speaking).

3. Optimize for Revenue & Sales, Not Just Conversions

In most cases, conversion tracking is technically set up properly.

A company has a rough idea of how many leads came in last month, and roughly which channels (or campaigns) drove them.

But how many of those leads become actual customers? What are the deal sizes or average transaction values for each? And how do those total revenue numbers for each campaign now stack up?

However factoring in the number of sales each campaign generates, not to mention total revenue, could conflict and tell a completely different story.

It also means you need a way to link actual customers (like John Smith) with revenue amounts ($5,000) against the channel or medium which delivered them (AdWords Campaign A) and the spend it took ($400).

If you’re not using an all-in-one CRM or marketing automation tool, try a simple free solution like LeadIn.

While you’ll have to do some manual data entry (boo!) to line up form conversions with what you’re seeing from other campaigns, it will help you begin to bridge the gap to discovering which marketing activities are resulting in the best ROI (yay!).

You have no business making any significant changes to a landing page until all of these other issues have been thoroughly reviewed first.

But when that happens, you can use something like the Kissmetrics A/B Test Report to see how changes might impact specific parts of your funnel. For example, you can see what impact a headline test might have (if any) on purchases.

Kissmetrics uses this on a few different steps in the funnel. For example:

Initial Customer Sign Up

Received Data (Customer successfully installed the JavaScript.)

Received Custom Data (Customer set up custom events.)

Now for all the of the tests they run, they can go beyond just the initial surface level data (i.e. Initial Customer Sign Up) and go as far down as the third step (Received Custom Data) to get the most accurate data possible.

When you have this level of granularity into your funnel, you can easily spot when one variant or test results in increased Initial Sign Ups but loses in Received Custom Data (which happens often). In those cases, you can comfortably stick with the original because you’re not getting fooled by the lure of big vanity metrics.

Conclusion

It’s tempting to wanna make big numbers go up.

Especially when it’s something tactical and easy to understand like a page’s conversion rate.

But that rate doesn’t exist by itself.

Making it go up is easy. But doing so without sacrificing quality is hard.

If possible, start first by improving your offer, strategically adding friction or education, and setting up full funnel tracking to help you increase conversion (and revenue).

Making these changes with a deeper understanding that conversion rate increases will cascade down to lead quality will help make sure you’re not sacrificing results in the process.

A really thoughtful post there. Conversion rate can backfire due to many reasons. Even with the slightest change in the placement of ad copy can lead to so much change in the conversions.

In in my initial days, I thought that, conversion rate cannot change by changing small things, but over the time I had to learn it the hard way.
One major key which plays a role is that one needs to be really patient for stepping up the numbers game. It is not a one night task. And proper A/B testing can do wonders, but one needs to be really patient.

“It also means you need a way to link actual customers (like John Smith) with revenue amounts ($5,000) against the channel or medium which delivered them (AdWords Campaign A) and the spend it took ($400).”

Ah. Marketing and Sales Nirvana. Wouldn’t it be nice to be able to do this. I would take it one step further and concentrate on margin as approve to revenue since spend is paid for with margin. But that is another discussion.

I so wish it was easy to accomplish. But I have yet to accomplish this anywhere I have worked. it is usually a systems and data problem. So I am left looking at overall sales and conversion numbers and large costs. Did we make more than we spent. Great. Granular details below that are so hard to come by. And amazingly to convince anyone how important these details are.

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